After the Chinese digital Yuan prototype garnered attention, the number of countries where central banks have issued digital currencies has increased.
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While the value of Bitcoins and NFTs may have dropped over the previous year, another cryptocurrency approach is becoming more and more well-liked globally and presenting a whole different side of the blockchain.
The concept of decentralized, untraceable bitcoins is completely at odds with central bank digital currencies, which are controlled by governments just like traditional currencies are, as Statista’s Katharina Buchholz explains below. A number of small countries, including Nigeria as of October 2021, have introduced central bank digital currencies, while other more populous nations are about to ride another cryptocurrency hype train.
According to the Atlantic Council’s Central Bank Digital Currency Tracker, Caribbean countries like the Bahamas, Grenada, Dominica, and Saint Lucia implemented CBDCs even earlier than Nigeria. The Sand Dollar of the Bahamas, which was introduced in 2019 and became the first central bank digital currency in the world, paved the path for the small nations of the region to adopt it quickly.
In April 2019, the Chinese digital Yuan prototype garnered attention, however the project has not since advanced. China has a strong digital and mobile payment system, similar to Nigeria. Large portions of the populations of the two countries moved directly from cash to digital payment methods, whether they be app- or text-based, skipping card payments entirely. Central banks in developing nations take into account the possibility of digital currencies reaching the unbanked.
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The gathering of data is another justification for certain governments to support official digital currencies. Due to widespread digital payments and strict government surveillance, Chinese administrators already have access to a vast amount of payment data. The introduction of the digital Yuan will only increase this grasp of how people spend money, even though the country’s central bank has said it will limit traceability and create what it calls “controllable anonymity.”
Every Yuan in use will have a physical or digital equivalent with the introduction of the digital currency. Analysts predict that the Chinese government will increase the supply of digital currency and decrease the supply of physical currency in the market in the future. Some even believe China intends to convert all Yuan to digital currency at some time.
Russia, Thailand, Malaysia, South Korea, Sweden, the United Arab Emirates, and Saudi Arabia are more countries with CBDC pilot programs. Which initiative might get a proper launch next, though, is unknown. The insider mentioned that there are actual plans to start a CBDC in a number of countries, including Canada, Australia, Brazil, and India.
A pilot program for the digital Euro is expected to begin in participating countries in 2023.
The central banks might request a new global network of currencies with the introduction of CBDCs after a stagflationary crash, as previously explained by Alt-Brandon Market’s Smith, in order to “stop such a crisis from ever happening again.” The SDR basket, or something quite similar, will be on hand and waiting, provided by the BIS and IMF. Over a brief period of time, the bankers will remove all physical currency, at which point a worldwide digital system will take over. With the exception of those who trade in commodities, black markets, and barter, all privacy in trade will disappear.
The emergence of CBDCs may potentially lead to the transformation of money and economic participation into privileges rather than rights. Digital trading might be connected to a similar social credit system to the one that exists in communist China.
Would you like to access your savings and checking accounts? Better keep your lips closed if you have anything bad to say about the company since your money could disappear in an instant if a stranger or neighbor reports you using a cell phone app. The responsibility then shifts to you to demonstrate your “loyalty” and regain access. Until you are found innocent, you are guilty. Perhaps you don’t want to use the newest, unproven mRNA vaccine against the dubious pandemic threat. If your ability to perform economically is managed digitally, you won’t have much of a choice.
If we allow central banks to fully digitize money and trade, this is the world we will live in. It is an authoritarian environment right out of a nightmare. Before the current situation becomes so severe that people can no longer concentrate on anything other than their own issues, the general public must be made aware of the great risk that CBDCs pose.